The costs of implementing the House-passed Medicare reform bill (HR 1) would be $405 billion over 10 years, while the Senate bill (S 1) would cost $461 billion over the same period, according to estimates in a report released yesterday by the Congressional Budget Office.
Both estimates come in over the $400 billion agreed upon in the budget resolution passed by Congress earlier this year.
The new report from the nonpartisan budget office will set the base for negotiations between the House and Senate and will require either reduced spending or cost offsets to come in under the agreed budget.
Both bills would create a voluntary, federally subsidized prescription drug benefit under a new Part D of the Medicare program with additional subsidies for certain low-income beneficiaries. A reconciled bill is not expected out of conference before September.
Reps. William Thomas (R-Calif.) and William Tauzin (R-La.), co-chairs of the House delegation to the conference committee, pledged in a joint statement to keep the cost of the final Medicare conference report under the $400 billion ceiling agreed upon in the budget resolution.
The estimate of the Senate bill includes a requirement that pharmacy benefits managers disclose certain information. That provision alone, sponsored by Sen. Maria Cantwell (D-Wash.), is estimated to cost $40 billion. Without it, the Senate bill would come in at $421 billion over 10 years.
The estimate for the House bill does not include the estimated $174 billion over 10 years for a measure, attached to the bill just prior to passage, that would create new tax-free health savings accounts.